Steps to Starting an Online Business

In fact, starting an online business is much the same as starting any business. You should go to your local town hall and find out what the requirements are to form a business in your area. Also ask what is required at the state and federal level. In most communities you must register a trade name. If you will operate as a Corporation or a Limited Liability Company other registration requirements are required. Also, if you operate from your home you should inquire about the local zoning laws. All these steps are needed for any business.

Learn about the Sales Tax requirements. If you do not have nexus in another state you can sell and ship merchandise to residents of another state without charging Sales Tax. However, sales to residents in your state will require collection of Sales Taxes and remittance to your state’s Sales Tax Department. The Federal Trade Commission passed a rule in 1975 requiring you to ship merchandise within 30 days of receipt of payment. You must abide by the Truth in Advertising requirements which essentially require you not to be misleading in your ads. For example, when giving a guarantee, you must describe in detail how that will be carried out. It all boils down to the fact that you should operate your business honestly, which, by the way, is an essential key to your future success.

If you are going to be buying inventory for your online business from distributors you should:
• Make sure you are buying from a reputable source.
• Check references and call the Better Business Bureau and Consumer Affairs divisions in the distributors state concerning complaints.
• Try to obtain merchandise on consignment, thus conserving your cash.
• Look into companies that will drop ship on your behalf.
As a reseller you can then offer a larger selection. These techniques can supplement special sales of high mark up items you keep in inventory.